Semiconductor firms report revenue increases

FLUCTUATIONS Although 2004 sales rose for the nation's semiconductor companies, most saw declines
in December as a result of a drop in product shipments

STAFF WRITER , WITH AGENCIES

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), the world's two largest contract chip makers, both said yesterday their monthly revenue in December rose, but dropped slightly from the previous month as shipments declined.

TSMC's sales in December came in at NT$19.92 billion (US$622 million), down from NT$20.99 billion in November but up 5 percent year-on-year.

For the whole of 2004, the company's revenues rose 26.8 percent to NT$255.99 billion from NT$201.9 billion in 2003, the company said in a statement to the Taiwan Stock Exchange.

TSMC Chief Financial Officer Lora Ho (何麗梅) said in the statement that the December sales decline reflected a fall in chip shipments.

The decline is in line with forecast by SinoPac Securities Co (建華證券), which maintained a positive view on TSMC and expected the chipmaker's average selling price should remain at about the same level sequentially.

"We forecast 10-12 percent quarter-on-quarter decline in TSMC's revenues with capacity utilization dropping to a forecast 75 percent in the first quarter of 2005," SinoPac said in an investment report released yesterday.

"We forecast revenues will bottom in February -- a short month made even shorter on account of the Lunar New Year vacation -- and seasonal weakness," it added.

Separately, rival UMC also reported yesterday its sales in December fell to NT$8.88 billion (US$277 million) from NT$9.28 billion in November. The figures were up 6.36 percent from a year earlier.

For the whole of last year, UMC saw revenues of NT$117.31 billion, up 38.24 percent from NT$84.86 billion in 2003, the company said in a statement.

UMC's sales decline last month was slightly below market expectations, according to SinoPac, adding that UMC's 2004 revenues also below the chipmaker's prior forecast of a 15-17 percent quarter-on-quarter drop.

UMC said in October it expected sales in the fourth quarter to fall 15 to 17 percent from the third before recovering over the following six months.

With UMC's key client Xilinx Inc revising down its fourth-quarter outlook and subsidiary MediaTek Corp (聯發科技) reporting lower-than-expected December sales, SinoPac said UMC may see falling revenues in the first quarter this year.

Xilinx, the world's biggest maker of programmable semiconductors, on Thursday said third-quarter sales dropped as much as 12 percent from the second period, compared with an earlier forecast of as much as 8 percent.

"We forecast UMC's revenues will decline 10 percent quarter-on-quarter in first quarter this year," SinoPac said in the report.

The securities firm said the IC foundry sector is expected to see a 5 percent annual increase in revenues this year. Therefore, SinoPac maintained its target share price for TSMC at NT$55 and forecasted UMC shares to trade between NT$19 and NT$22 in the near term.

On the local bourse, TSMC shares ended down 0.4 percent to NT$47.8 while UMC closed 0.5 percent lower at NT$19.8, prior to the release of their December sales figures.